Hungary reduces taxes for business

The Hungarian government has adopted a new economy protection action plan, in order to simplify the taxation system.

Among other changes, the rates of the social contribution tax and the tax on small businesses will decrease by two percentage points, from 19.5 per cent to 17.5 per cent as of July 1.

“First quarter GDP data suggests that the Hungarian economy could expand at a rate of around four per cent in the future,” said finance minister Mihály Varga. “Despite this, projections show that the growth of the European economy, including the eurozone and Germany, will slow down. The government wishes to ensure that the Hungarian economy’s growth rate remains two per cent above the average EU growth rate.”

Hungary’s advertising tax could be reduced to zero by the end of 2022, and the VAT on accommodation services will decrease to five per cent, while VAT up to five million forints (15,000 euros) will be refunded in the case of housing projects carried out in small settlements.

Mr Varga also indicated that the authorities are also seeking to simplify taxation, including a reduction in the number of taxes.